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SUSTAINABLE F O U R T H INVESTMENT Q U A R T E R REPORT 2 0 2 0 Marketing material. Environmental, Social and Governance is referred to as ESG throughout.
CONTENTS INT ROD U CT I ON Looking ahead from a transformative 3 year for sustainable investment (and the world) SU STAI NAB I L I TY INSIGH TS We’re fully integrated! But what does 4 it really mean? Climate Progress Dashboard: Will 7 a Biden Paris U-turn inspire action? The US Department of Labor pension 11 ruling could slow – but won't halt – the use of sustainable investments What investors have been reading, 14 watching and listening to AC TI VE OWNER SHIP On thin ice: the danger posed 16 by thawing permafrost and how businesses need to prepare How we're tackling forced labour 18 issues in Singapore How we’re challenging the Tesco 20 board on executive pay Engagement in numbers 22 Voting in numbers 23 Which companies we’ve engaged with 24 Engagement progress 30
Against the unusual backdrop of a global pandemic, this year
we achieved our target of integrating environmental, social and
governance issues into our financial analysis. We expect 2021 to be
another record year for inflows into sustainable investment funds.
As more people seek investments with purpose, our ability
to measure and report on impact is crucial.
THE EXPONENTIAL GROWTH
OF SUSTAINABILITY POLICY
There has been a range of government action
around the world.
Hannah Simons
Head of While the majority of policy has been favourable for
Sustainability ESG, the backdrop in the United States has been at
Strategy odds with the rest of the world when it comes to a
new pensions ruling. Sarah Bratton Hughes, Head of
Sustainability in North America, writes on this on p11.
ESG integration has been a key focus at Schroders
Meanwhile 2021 marks an important year for
in recent years. In 2019 we publicly committed to
financial institutions in the EU as sustainability-related
ensuring ESG factors were appropriately integrated into
disclosures regulation comes into force. This is part
investment decisions across the assets we manage.
of the European Commission’s broader Sustainable
We achieved our target this quarter, driven by a rigorous Finance Action Plan to support a transition
internal accreditation process originally launched in to a greener future.
2017. Now it is applied to each investment desk.
Regulators in Hong Kong and Singapore are also
The events of this year have shown just how important looking into how environmental risks can be brought
it is that sustainability considerations are not just into the picture, and in Australia the regulator of
a tick-box exercise. pension funds and insurers already requires them
to consider ESG risks.
At Schroders, as an active manager, sustainability
is an integral part of how we invest – read more from ACTIVE OWNERSHIP IN PRACTICE
Stephanie Chang, Schroders’ Head of Integration,
At Schroders we believe we have certain responsibilities
on p4.
as investors and as guardians of our clients’ assets.
We’ve also been busy this year developing a new We seek to actively influence corporate behaviour
impact reporting framework. Using proprietary ESG to ensure the companies we invest in are managed
tools, we will soon be helping investors understand in a sustainable way.
more about the impact their portfolios have on people
The active ownership section of our report captures
and the planet.
our voting and engagements from the fourth quarter.
From summary stats to in-depth case studies, this
ON THE PATH TO NET ZERO section provides transparency over how we are using
It had been said that 2020 would be a critical year for our influence to drive change.
addressing climate change, arguably one of the most
pressing long-term issues we face. You can read more about how we’re engaging with
Russian businesses over thawing permafrost (p16),
With the COP26 climate summit now taking place our ask of Tesco on executive pay (p20), and how
towards the end of 2021, we expect a greater focus we’re tackling the treatment of migrant workers
on climate risk over the course of this year. in Singapore (p18).
New US president Joe Biden’s U-turn on climate policy Schroders’ chief executive Peter Harrison wrote
could inspire action, as Schroders’ Global Head of in the foreword to our 2019 report that “after
Sustainable Investment Andy Howard explains on p7. a challenging 2018 for markets, I can assure you
that our commitment to sustainability as a firm
Schroders has joined the Net Zero Asset Managers and as an investor remains undimmed”.
initiative, supporting the goal of net zero greenhouse
gas emissions by 2050 or sooner. You can expect more Despite headwinds, Schroders can demonstrate
on how we will encourage the transition. that pledge has been kept.
Sustainable Investment Report
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Q4 2020
S U S TA I N A B I L I T Y I N S I G H T S
We’re fully integrated!
But what does it really mean?
In 2019 Schroders’ chief executive publicly announced our commitment
to full ESG investment integration by the end of 2020.
and what’s next in Schroders’ sustainability journey.
Our annual report will be publicly available towards
the end of Q1 2021, so keep an eye out.
For now, however, we are bringing things back
to basics, with a focus on the importance of
Stephanie Chang
ESG integration, not only as a commitment for
Head of Schroders, but for the entire investment industry.
Integration
WHAT IS ESG INTEGRATION?
We are incredibly pleased to announce that, through There are a number of approaches to investing
the tremendous efforts of our 60+ investment teams sustainably – from thematic to best-in-class –
and sustainable investment team, we achieved as pictured below. ESG integration is about
that target1. understanding the most significant ESG factors
that an investment is exposed to, and making sure
Our 2020 annual sustainable investment report will that you’re well positioned for upside or adequately
take a closer look at our journey to full integration compensated for any associated risk.
APPROACHES TO SUSTAINABLE INVESTING
Best-in-class investing Thematic investing
Active ownership Negative screening
ESG integration Impact investing
Source: Schroders
1 For certain businesses acquired during the course of 2020 we have not yet integrated ESG factors into investment decision-making.
There is also a small number of strategies for which ESG integration is not practicable or now possible. For example passive index tracking
or legacy businesses. Investments in the process of being, or soon to be, liquidated and certain joint venture businesses are excluded.
Sustainable Investment Report
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Q4 2020
This has come to the forefront of investing as a Importantly, ESG integration isn’t just about
wide range of environmental and social challenges researching climate change or excluding
become increasingly prevalent. companies at the start of the process. It should
be, as its name suggests, integrated or embedded
Integrated strategies focus on managing risk within every stage of the investment process –
and identifying potential winners to deliver long- and certainly not an afterthought or one-off
term value. Essentially it is about asset managers box-ticking exercise.
considering both financial and ESG issues in their
processes given both can pose material risks. WHY IS IT IMPORTANT?
An ESG integrated investment strategy is not the Fundamentally, ESG integration is about managing
same as a sustainable or impact investment strategy. risk. As we mentioned earlier, ESG risks have been
growing very quickly. The World Economic Forum
Best-in-class sustainable strategies may have identifies the top five global risks in terms of both
additional focus on companies with leading likelihood and impact. A decade ago these risks
sustainability profiles, often in combination with were dominated by economic issues. In the last
avoiding potentially controversial activities or sectors. five years, these were quickly overshadowed by
environmental and social issues – and in 2020
Impact investing, while still seeking a financial return, the top five most likely global risks were
is intended to generate a specific, measurable positive all environmental.
impact on society.
Our CEO said earlier this year that “ESG
[integration] won’t exist in 5 years time, it's
For more information on the different approaches, what people will be expected to do”. What
check out our recent guide: Everything you need was once perceived as a “nice to have” is now
to know about sustainable investing essential to successful investment, and those
that fail to integrate risk being left behind.
TOP FIVE GLOBAL RISKS IN TERMS OF LIKELIHOOD
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Rank
1
2
3
4
5
Economic Geopolitical Societal Environmental
Source: World Economic Forum Global Risks Report 2020
Sustainable Investment Report
Q4 2020 5
WHAT DOES THIS MEAN IN PRACTICE?
You could ask this question to 100 asset managers the leverage that voting rights gives us. It is just as
across the industry and likely not get very many identical important across other asset classes whether that
answers. Our 2020 Institutional Investor Study identified is corporate credit, external managers or real estate.
greenwashing as the greatest barrier to sustainable Monitoring your investments, encouraging change
investing – so understanding what ESG integration really that is aligned with our investment interest and
means in practice is more important than ever. holding them to account is critical to the value-add
we bring as active investors.
At Schroders, integration means embedding ESG in
every appropriate stage of the process. This will mean
different things for different asset classes. If you are interested in finding out more about
active ownership, visit our dedicated web pages
For example, in our fundamental equity teams ESG
largely features in bottom-up company research. Across
our credit teams, ESG will feature in top-down thematic Investment desks’ processes are assessed for
research as well as bottom-up issuer research. We ESG integration and validated through the firm’s
have also developed a consistent, scored approach ESG accreditation framework on an annual basis.
to assessing the ESG qualities of external managers. Successful ESG integration relies on our fund
managers and analysts embracing and executing this
Regardless of the asset class, it is imperative to have responsibility. In support, our sustainable investment
a robust framework that allows for consistency across team sits at the heart of Schroders’ sustainability
the fundamentals. Schroders’ proprietary tools and efforts, offering expert knowledge, practical advice
collaborative platforms have allowed us to reach full and collaborative opportunities.
integration in a consistent manner. While practical
application of a tool may look slightly different for, However, ESG integration is perhaps easiest
say, emerging market equity versus infrastructure understood in the context of an actual investment
debt, our stakeholder approach to sustainability is a strategy. For practical case studies of how we integrate
clear and consistent theme that runs across all of our ESG across different asset classes, check out our 2019
integrated strategies. Annual Sustainable Investment Report.
Importantly, active ownership is a consistent feature Our 2020 Annual Sustainable Investment Report will
across our integrated strategies and investment desks unveil what lies ahead for Schroders after successfully
are expected to evidence this. Engagement is fairly reaching full ESG integration. The report will be
common across equities, where it is coupled with available towards the end of Q1 2021.
SCHRODERS’ STAKEHOLDER MODEL
Employees Communities
How do your employees What support do you offer
perform? How motivated your local community?
is your team? Have you committed to
protect human rights?
vernance
Go
Suppliers Customers
How exposed is your supply
chain to disruption risks?
Issuer How is your
brand perceived?
How strong are your What’s in your
supplier relationships? product pipeline?
Go
vern a nce
Environment Regulators
Have you put in place an How competitive is
energy plan? Are you managing your market? Are you
operating impacts? paying a fair rate of tax?
Source: Schroders
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Q4 2020
S U S TA I N A B I L I T Y I N S I G H T S
Climate Progress Dashboard:
Will a Biden Paris U-turn inspire action?
The latest update to our Climate Progress Dashboard suggests the current pace
of change will result in temperatures rising by 3.8°C above pre-industrial levels.
Andrew Howard
Global Head
of Sustainable
Investment
The 26th UN Climate Change Conference of the Parties
(COP26) would have taken place in Glasgow, Scotland,
in November 2020 if it were not for the coronavirus
pandemic. Global leaders were expected to come
back together with tougher and more detailed plans
to underpin the Paris Agreement.
While COP26 was delayed until 2021, the latter half
of 2020 saw the stars align around much tougher and
faster action to cut global greenhouse gas emissions.
The 3.8°C rise above pre-industrial levels suggested
by our latest Climate Progress Dashboard update is
down from the 3.9°C rise recorded in the middle of
the year, but still a long way from the “below 2°C” limit
enshrined in the Paris Climate Accord. However, there
are signs of tougher action ahead.
THE PARIS AGREEMENT IN A NUTSHELL
The central aim of the Paris Agreement is to
strengthen the global response to the threat of
climate change by keeping a global temperature
rise this century well below 2°C above pre-
industrial levels. Signatories are aiming to limit
the temperature increase even further to 1.5°C.
There is no silver bullet to the threat climate change
poses. It requires aggressive policies, rapid capital
reallocation and strong financial incentives, among
other measures.
But there are four signs we may be on the brink of
rapid change, not least in the election of Joe Biden
in the US.
Taken together, they paint a picture of increasing
pressure on the status quo. Assuming statements
of intent translate into action, we could start to see How might climate change affect investment
the long run temperature rise implied by our Climate returns? Watch our short video on p15.
Progress Dashboard pushed down much further.
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Q4 2020
SCHRODERS' CLIMATE PROGRESS DASHBOARD*
Political change Business and finance Technology solution Entrenched industry
Political ambition Corporate planning Electric vehicles Oil & gas investment
2.7° 3.4° 3.2° 3.1° 3.8°
Aggregate implied
temperature rise
Public concern Climate finance Renewable capacity Fossil fuel reserves
3.3° 5.5° 3.0° 4.7°
Political action Carbon prices CCS Capacity Fossil fuel production
2.9° 3.1° 4.9° 6.1°
Source: *Temperatures are measured in degrees Celsius. Data as at 30 September 2020.
1. ALIGNMENT OF COVID RECOVERY PLANS
WHAT IS SCHRODERS’ CLIMATE TO CLIMATE GOALS IN EUROPE
PROGRESS DASHBOARD? Many governments have committed to ensuring the
rebuilding of their economies is aligned to their long
"Schroders developed the term climate goals. It is a widely-held view that the
coronavirus crisis recovery is an opportunity to redesign
Climate Progress Dashboard to more sustainable economies and tackle climate change.
track the progress implied by
The EU Green Deal is at the heart of the recovery
a range of factors, from carbon in Europe. Agreed in 2019, it is a policy framework
prices to renewable and and package that aims to transform the European
carbon capture and storage economy, with the overarching goal of achieving
climate neutrality by 2050.
capacity. The dashboard was
developed in mid-2017" Meanwhile the European Commission announced
a recovery instrument called Next Generation EU,
embedded within a revamped long-term EU budget,
The dashboard is updated quarterly with in May. Later in the year, the European Parliament
accompanying commentary from Andy Howard, and EU member states reached an agreement on the
Global Head of Sustainable Investment. To find €1.8 trillion package, including a commitment that 30%
out more, visit our website. will be spent on fighting climate change. That is the
largest share of the largest European budget ever.
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Q4 2020
SHARE OF GLOBAL GDP AND GREENHOUSE GAS EMISSIONS COMMITTED TO NET ZERO
50%
40%
30%
20%
10%
0%
2017 2018 2019 2020
% of global GDP % of global GHG emissions
Source: Schroders analysis of media reports and industry studies, World Bank.
NUMBER OF COMPANIES WITH EMISSIONS PLEDGES RECORDED BY SBTi
Number of companies
1,200
1,000
800
600
400
200
0
2015 2016 2017 2018 2019 2020
Source: Science Based Targets Initiative (SBTi).
2. BIDEN’S 180 DEGREE TURN ON CLIMATE into green industries and technologies. He has laid out
POLICY IN THE US a US$2 trillion clean energy and infrastructure plan.
Joe Biden’s presidency is likely to turn US climate
policy on its head. On the day the US formally left It will also require tighter regulation of higher-emitting
the voluntary Paris Agreement under Donald industries, including oil and gas, utilities and autos.
Trump, Biden confirmed that he planned to bring
the nation back into the fold once he is confirmed. 3. NEW NET ZERO EMISSIONS PLEDGES IN ASIA
INCREASE SHARE OF GLOBAL GDP COMMITTED
TO NET ZERO
“Today, the Trump Administration
There has been a slew of national commitments
officially left the Paris Climate to net zero emissions.
Agreement. And in exactly
77 days, a Biden Administration "Since October, leaders in China,
will rejoin it” Japan and Korea have all made
Joe Biden, 5 November 2020 – Twitter net zero pledges"
The Barack Obama administration entered the Paris In total, countries or US states representing more
Agreement in 2015. Biden’s pledge to rejoin and to than one third of global greenhouse gas emissions
commit the US to a net zero emissions reduction target and close to half of global GDP have now made
by 2050 is expected to mean significant investment net zero commitments.
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Q4 2020
4. RAPID INCREASE IN COMPANY The SBTi is a partnership between the climate research
EMISSION-REDUCTION TARGETS GLOBALLY provider CDP, the United Nations Global Compact,
A growing number of companies have made ambitious World Resources Institute and the World Wide Fund
public commitments to decarbonise. Over the last few for Nature.
years, the number of companies which have logged
More than 1,000 businesses are working with the SBTi
their pledges through the Science Based Targets
to set science-based targets and report progress on an
initiative has ballooned.
annual business. Last year that figure was less than 400.
A SPOTLIGHT ON CARBON CAPTURE
AND STORAGE
Look out for a full explainer on the pros,
cons and investment implications of
carbon capture and storage coming
to Schroders Insights in 2021.
Carbon capture and storage (CCS) is one of
the necessary tools available to fight climate
change. It is the process of capturing carbon
dioxide, transporting it and permanently
depositing it underground.
The aim is to reduce the carbon emissions
produced by manufacturers, typically in “heavy”
industries such as utilities, oil & gas, and heating.
CCS can capture up to 90% of CO2 emitted
by a factory.
As at 30 November 2020, there were about
50 CCS projects in motion across the globe.
Emissions from industrial processes are usually
captured at a large “point source”, such as a
natural gas field, power plant, cement factory
or steel plant. There are a number of techniques
used for it, but the most widely adopted is the
use of liquid solvents like amines to absorb
carbon emissions as they travel through large
factory chimneys.
Emissions are then compressed into liquid
form and injected into a geological formation
underground, such as depleted oil & gas fields
or saline formations, for permanent storage.
Over hundreds of years, these carbon emissions
will be absorbed by the surrounding rocks.
When executed properly, the emissions
will not escape back into the atmosphere.
When done poorly, they may escape and
re-enter the atmosphere. Large quantities
of CO2 emitted suddenly can cause death
by asphyxiation in a radius of 300m.
Deep ocean storage is an alternative storage
method but less common – it can further
acidify oceans and is illegal under many
international conventions.
Sustainable Investment Report
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Q4 2020S U S TA I N A B I L I T Y I N S I G H T S
The US Department of Labor pension rules
could slow – but won’t halt – the use of
sustainable investments in the market
US regulation potentially limiting the use of ESG factors is at odds with policy
and regulation elsewhere in the world.
There has been exponential growth in global
sustainability policy over the past three years. While
the majority of it has been favorable for sustainable
and ESG investing, the backdrop in the United States
Sarah Bratton private pension space has been at odds with much
Hughes of the rest of the world.
Head of Sustainability,
North America
ESG REGULATION IS GROWING EXPONENTIALLY
Increase in ESG regulation globally since 2000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220
Investors Issuers Investors and issuers
Regulations collected by MSCI and the UN PRI’s ESG regulations database; regulations can be either mandatory, voluntary, or explanatory
in nature – and are collected globally. Regulations database has been compiled using numerous sources, e.g. US Federal Register,
Publications Office of EU, ILO etc. Source: MSCI ESG Research, UN PRI January 2020.
Sustainable Investment Report
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Q4 2020PECUNIARY OR NON-PECUNIARY, prudently and solely for the economic benefit of the
THAT IS THE QUESTION plan. The proposed regulation was intended to provide
In summer 2020, the US Department of Labor guidance to ERISA fiduciaries in the context of proxy
proposed two changes to regulations that had the voting and other exercises of shareholder rights,
potential to severely limit the use of ESG strategies particularly as to whether and when it was appropriate
for private pension, including multi-employer, plans. for fiduciaries to vote (or when fiduciaries must not
These plans are governed by the Employee Retirement vote) on ESG-focused resolutions.
Income Security Act of 1974 (ERISA), the US legislation
under which savers’ interests are safeguarded. THE FINAL OUTCOME
In November, the Dept of Labor issued a final rule
The first piece of regulation, “Financial Factors in
on financial factors that was more flexible than
Selecting Plan Investments,” focused on whether it was
anticipated. In response to the overwhelming
at odds with a plan sponsor’s fiduciary duty of seeking
opposition in the public comments, the final rule
to maximize returns to incorporate ESG factors and
struck out any mention of ESG. In fact the Dept of
funds into a plan’s portfolio. The proposed rule cited
Labor acknowledged in the preamble that ESG factors
that ESG factors were “non-pecuniary” – meaning not
can be financially material. The final rule is focused
financially material – in nature.
on ensuring that a fiduciary select investments based
solely on pecuniary factors and prohibits fiduciaries
"While the public had a short from sacrificing returns or adding additional risks
in order to promote non-pecuniary goals.
period in which to respond,
a study led by US lobby group
A FOCUS ON PECUNIARY FACTORS
the Forum for Sustainable and
Responsible Investment and “ERISA fiduciaries must evaluate investments
and investment courses of action based solely
Morningstar reported that there on pecuniary factors – financial considerations
were 8,737 comments about the that have a material effect on the risk and/or
return of an investment based on appropriate
proposed regulation with 95% investment horizons consistent with the plan’s
opposing the rule" investment objectives and funding policy.”
Many argued that the Dept of Labor’s definition of ESG The final proxy voting regulation was released in
reflected an exclusionary approach and disregarded December and the principle is consistent that fiduciaries
the “financial materiality” of ESG issues. are prohibited from voting on resolutions focused on
environmental and social issues that are not financially
The second piece of proposed regulation, “Fiduciary
material and beneficial to the plan and plan beneficiaries.
Duties Regarding Proxy Voting and Shareholder
However, the final rule adopts a more flexible, principles-
Rights,” released in August, was centered on ensuring
based approach than the proposed rule.
that fiduciaries exercise their proxy voting duties
Sustainable Investment Report
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Q4 2020SO, WHAT DOES THIS MEAN FOR ESG WHERE DO WE GO FROM HERE?
IN PRIVATE PENSION PLANS? The new rule takes effect on January 12, 2021, prior
Based on our interpretation, there are a few main to the transfer of power occurring on 20 January.
implications we see: We expect a more positive stance toward certain
aspects of sustainable investing from President-
1. There will be a continued focus on understanding and Elect Biden, given his campaign pledges to take
assessing the financial benefits of ESG integration action on climate change. He has recently named
to demonstrate the contribution of such factors to John Kerry to his cabinet as US Special Presidential
delivering better long-term risk-adjusted returns. Envoy for Climate, which will also be a new position
2. Robust ESG integration should be systematic, on the National Security Council; Brian Deese
not outsourced; meaning ESG analysis lives with (formally the Global Head of Sustainable Investing
investment teams and it is not an outsourced at BlackRock) to lead the National Economic Council
ESG function. It needs to be embedded into the and Gina McCarthy, Head of White House Office
investment process in order to maximize long-term of Climate Policy. Even so, reversing the Dept of
risk-adjusted returns. Labor’s final rule is not straightforward. Although
the Congressional Review Act could be used to
3. There will be continued focus on using an overturn the rules, that is not assured, and unless
inclusionary approach to sustainable investing, the Democratic Party holds a majority in the Senate,
rather than an exclusionary approach that is it may be even less likely. The new administration
focused on negative screening. Thematic, could agree that it will not enforce the new rules
impact and broad screen strategies are likely until they prepare further guidance, and this
to be inappropriate. guidance could include a broader interpretation
4. Active managers will continue to engage with of what constitutes pecuniary factors. Another path
investee companies in order to ensure these to overturning the rules could be private lawsuits
companies are addressing ESG factors that may – especially given the short comment periods and
present material risks or financial opportunities speed at which the rules were adopted and, in the
to their business. case of the financial factors rule, in the context of
the overwhelming number of negative comments
5. Operational implementation of the proxy voting
on the initial proposal and potentially negative
rule may be challenging and will require a review of
impact on ESG and passive investment funds.
proxy voting policies and engagement with clients.
It’s our expectation the rule will result in reduced
voting by ERISA plans.
WHERE DOES THE REST OF THE
A question remains as to whether passive solutions WORLD STAND ON SUSTAINABLE
would pass the pecuniary test. Many of the indices INVESTMENT POLICY?
used in connection with these strategies are
Governments around the world have been
constructed utilizing third-party ratings that are
committing to reaching net zero emissions
a bolt-on to the investment process, rather than the
and have been setting out roadmaps for
embedded approach taken by active managers that
transitioning their economies towards a
focuses on the material effects on the risk and return
greener future. The EU is probably the leader
of an investment. We believe that this “bolt-on” aspect
in this space, having already set out a very
of passives is unlikely to satisfy the Dept of Labor
ambitious action plan to reach emissions
requirement that the fiduciary focus solely on material
neutrality by 2050, which includes new
financial factors when considering an investment
regulation to ensure that the financial services
or investment course of action.
sector does its bit towards chanelling private
money to more sustainable businesses. There
"We expect a more positive is further movement in Asia, with regulators
in Hong Kong and Singapore looking into
stance toward certain aspects how environmental risks can be brought into
of sustainable investing from the picture, while in Australia the regulator of
pension funds and insurers already requires
President-Elect Biden, given them to consider ESG and climate change risks.
his campaign pledges to take
A comprehensive survey of sustainable
action on climate change" investing policy and regulation will feature
in the Q1 Sustainability Report in 2021
Sustainable Investment Report
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Q4 2020S U S TA I N A B I L I T Y I N S I G H T S
What investors have been reading,
watching and listening to
From the impact of a Biden presidency to the findings of our survey of institutional
investors, here’s a snapshot of what Schroders has published recently. Listen
to episodes from The Investor Download podcast. Or you can watch Global Head
of Sustainable Investment Andy Howard talk about the impacts of climate change.
For the latest, visit Sustainability Insights.
How sustainability is moving to the top of investors’ agendas
Ron Insana, Senior Adviser to Schroders and CNBC Contributor, talks
with Andy Howard, Global Head of Sustainable Investment, about
the latest sustainable investment trends and what we can expect
as we head into 2021.
What motivates investors – morals or money?
How much would it take to get you to invest against your beliefs?
10% return, 20%, perhaps even more? That's just one of the questions
posed to more than 23,000 investors around the world in a major study
into sustainable investing.
The views and opinion contained within the podcasts are held at the time of recording and are subject to change.
Gearing up against The environmental Why company culture
greenwashers: and social impact matters – and how
investors seek clarity on of a Biden presidency you track it
sustainability terminology
Ahead of the US election, We all know it matters, but how
Investors want a better Sustainable Investment Analyst do you measure and manage it?
understanding of sustainability Catherine Macaulay looked at Global and International Equities
terminology so as to avoid the key elements of the Biden Portfolio Manager Katherine
“greenwashers”, according climate agenda and its sectoral Davidson writes about why it is so
to the Schroders Institutional impactions, as well as the social important, how she assesses it,
Investor Study. element of his campaign. and how investors can influence it.
Read about the results from our Catherine argued a Democrat She argues culture is an informal
survey of 650 institutional investors victory would result in a step- institution within an organisation:
across 26 countries during April change in US climate policy. it’s the values and norms that guide
2020 – including comments from Biden would re-commit to the behaviour outside explicit rules or
Andy Howard, Schroders’ Global Paris Agreement and to a net zero policies. It’s the spirit rather than
Head of Sustainable Investment, emissions reduction target by 2050. the letter of the law. Job review sites,
and Elly Irving, Schroders’ Head She also wrote about implications academic research and employee
of Engagement. beyond the climate agenda. turnover are three of the sources
Katherine turns to.
Sustainable Investment Report
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Q4 2020How investment returns might be affected by climate change
Schroders has integrated climate change into its investment returns forecasts for the next three
decades, uncovering the stark impact global warming is set to have. Featuring economist Irene Lauro;
Head of Sustainable Investment, Andy Howard; and Kate Rogers, Head of Sustainability, Wealth.
Green and ESG bonds: How sustainability can What are the UN’s
what’s behind their rise? make a product stand out Sustainable Development
Goals? A quick guide
The green and social bond market Mannat Chopra, Sustainability
continues to grow, evolve and Support Analyst in Schroders’ The United Nations’ 17 Sustainable
diversify, remaining a helpful European Equities team, explains Development Goals are a “blueprint
tool in driving sustainability. how sustainable products can give to achieve a better and more
companies an edge across a range sustainable future for all”. They’re
Saida Eggerstedt, Head of of different industries. He also a “call for action” to “promote
Sustainable Credit, writes about asks: can this last as sustainability prosperity while protecting
how this year has seen something becomes the norm? the planet”.
of a growth spurt for green bonds
with the market heading toward Read Mannat’s take on what Read what Schroders’ Global Head
the $1 trillion milestone. makes a product sustainable, of Sustainable Investment, Andy
how some products help people Howard, has to say about them.
As well as significant government behave as responsible consumers,
bond launches, there has been as well as the topics of enabling Andy explores whether we are on
increased issuance from the sustainability in business to track to meet the goals by 2030,
corporate sector and from a business products and services how they’re relevant to investment,
wider range of businesses and and whether sustainable products and how investment firms have
industries. She answers questions could lose their edge. developed their use of them.
on these trends.
Sustainable Investment Report
Q4 2020 15AC T I V E O W N E R S H I P
On thin ice: The danger posed by thawing
permafrost and how businesses need
to prepare
Thawing permafrost poses a significant risk, for example to Russian commodity
producers. We’re engaging with companies that need to assess, prepare and
actively respond to this risk.
It’s estimated that there’s more than twice as much
Holly Turner carbon stored in the earth’s permafrost than there
Sustainable is in the atmosphere – up to 1,600 billion tonnes.
Investment Analyst
Thawing permafrost represents a significant physical
climate risk to companies operating in permafrost
areas. For example, as soils shift, infrastructure is
Francesca Guinane threatened and floods become more likely.
Data Insights Unit
Relationship Manager
"Last year a sizeable fuel
tank leakage occurred in the
James Ferguson industrial city of Norilsk in
Research Analyst, Global
Emerging Market Equities
Krai, Russia, just above the
Arctic Circle"
Rapidly thawing Arctic permafrost is a prime example It increased fears over the impact of global
of how climate change is impacting natural ecosystems warming – and specifically thawing permafrost
and, in turn, business operations. – on infrastructure.
Permafrost is the name for ground that remains frozen Although a subsequent investigation did not identify
for more than two years. It has existed in this region permafrost thawing as a reason for the incident, we
for millennia. continue to view it as a significant infrastructure risk
to Russian firms.
Temperatures in Russia have increased by around
two and a half times the global average since 1970, We believe it should be at the forefront of risk
according to the Federal Service for Hydrometeorology considerations and capital allocation decisions of
and Environmental Monitoring. major Russian companies in the energy and materials
sectors in particular.
Another 1.9–3.4°С temperature rise has been predicted
by the middle of the century – and the increase could
be even more dramatic in critical winter months, HOW CAN THIS CLIMATE CHANGE RISK
a paper published in Russian Meteorology and BE QUANTIFIED?
Hydrology suggests. Schroders is committed to modelling investment
risks from physical climate change.
WHAT DANGERS DOES THAWING
PERMAFROST POSE?
Climate change is becoming a defining theme of
Permafrost covers about a quarter of the northern
the global economy. Schroders’ Climate Progress
hemisphere and its thawing leads to a multitude
Dashboard monitors change indicators across the
of environmental issues.
four categories that have the most influence on
Chief among these is the release of gases such limiting global temperature rises: political change,
as carbon dioxide and methane, which contribute business and finance, technology solutions and
to climate change and accelerate global warming. entrenched industry (i.e. fossil fuel use).
Read more on p7.
Sustainable Investment Report
16
Q4 2020We are aiming to deduce future permafrost risk This included which of a company's locations
in Siberia in a collaborative effort between Schroders’ are most at risk from climate change disruption
data insights unit, the sustainable investment team through permafrost destabilisation.
and our emerging markets equities team.
The answers will enable us to understand how
This involves studying the surface temperatures each company views physical climate risk
in the locations where the main companies operate from permafrost.
and identifying which are operating in at-risk areas.
Schroders’ data insights unit created a permafrost WHAT NEXT? SCHRODERS’ AIM
dashboard so we can analyse weather and TO INFLUENCE PERMAFROST
geographic trends in oil and gas production across MANAGEMENT
Russia. It allows us to track rates of permafrost
thawing in different locations. The aim is to collate feedback and rank the
firms based on our analysis.
HOW HAS SCHRODERS ENGAGED WITH
COMPANIES AT RISK? The information gathered from company
responses will not only allow us to better assess
In December 2020, Schroders’ global emerging market companies’ management of these risks, but
equities and sustainable investment teams engaged also to further develop our proprietary tool
with seven companies identified as operating and monitor how these risks evolve in the
in at-risk areas in Russia. coming years.
"We sent a list of questions Where companies are not sufficiently managing
current risks, or are not sufficiently prepared
alongside a tailored letter for future risks, we will engage further to
outlining our understanding influence them towards more sustainable
business practices.
of the permafrost risk relevant
to each company’s operations Ultimately we want to influence companies
where the current permafrost assessment
and how climate change is and management is not sufficient.
exacerbating the problem"
Sustainable Investment Report
17
Q4 2020AC T I V E O W N E R S H I P
How we're tackling forced labour issues
in Singapore
Schroders’ sustainable investment team contacted employers of migrant
workers in Singapore after the government announced new rules in July.
Wong Dan Chi Sameer Kakakhel
Sustainable Investment Analyst Equity Analyst
Lu Chuanyao Leong Jeannette
Equity Analyst Credit Portfolio Manager
Measures to stem the spread of Covid-19 have
drawn international attention to migrant workers’
living conditions in dormitories in Singapore.
In response, in June the Singapore government
indicated that new standards for migrant workers
would be established.
"We engaged with five companies
in Singapore that employ large
numbers of migrant workers
in the property development
and marine industries"
We asked how the new standards would impact how
they operate, about their approach to workers’ rights
and also how they planned to absorb any cost increases.
WHAT ARE THE NEW STANDARDS FOR
MIGRANT WORKERS' DORMITORIES
IN SINGAPORE?
Contractors are being encouraged to house
workers in dormitories near their construction
site. The new standards for dormitories are:
– Six square metres of living space required
– Maximum ten beds per room with one metre
between each and no bunkbeds
– One toilet, bathroom and sink to every five beds
– More sick bay beds: at least 15 per 1,000
bed spaces
The government plans to create additional
dormitories with these higher standards to
accommodate 100,000 workers to support this.
Sustainable Investment Report
18
Q4 2020HOW DID COMPANIES RESPOND
TO OUR QUESTIONS? WHAT ARE WE HOPING TO ACHIEVE?
Three of the five companies gave comprehensive Recognising that this is a new topic for many
responses. contractors, our initial focus will be on raising
awareness of how debt bondage is in fact
The engagements covered the range of measures forced labour.
taken and the attention paid to migrant workers’
wellbeing – both living conditions and safety. We asked the companies to educate their main
contractors on the topic, using existing platforms
The firms appeared to have strong relationships of communication.
with regulators and so were able to respond quickly
to the new rules. The two companies we spoke to seemed
responsive and to indicate they will consider it.
Another company responded only briefly. The final
company did not respond. As leading corporates, we believe that their
actions will have a positive trickle-down effect
The responses suggested that increased costs are and we will continue to encourage efforts
to be expected with the new standards for migrant in this area.
workers. These will be somewhat met by support
from the government.
The cost increase for the construction sector is
estimated to be 10–15%. Our analysis suggests an
increase in construction costs of one to three per cent
for developers.
The impact on profit/loss is expected to be less than
one per cent.
HOW WILL WE PROGRESS OUR ENGAGEMENTS
ON MIGRANT WORKER ISSUES?
Following our initial communication with these
five companies, we contacted two of the leading
companies on the topic of debt bondage – a term for
when someone is forced to work to pay off a debt.
We wanted to better understand the situation
on the ground and share our expectations.
"While there are policies and
commitments to 'zero forced
labour', our understanding of
the local market is that there’s
a risk contractors may not
consider debt bondage to be
forced labour"
Contractors may consider themselves to be compliant
with local regulation while exploitative practices may
be more likely to take place in the migrant workers’
place of origin.
The conversations were useful to understand
the challenge for developers with a rotating
schedule of migrant workers. This is compared to
manufacturing firms, which have a more consistent
workforce to manage.
Sustainable Investment Report
Q4 2020 19AC T I V E O W N E R S H I P
How we’re challenging the Tesco board
on executive pay
We’ve been engaging with companies on their approach to executive pay,
particularly given Covid-19. It’s Tesco that has been in the spotlight.
Daniel Veazey
Head of Corporate
Governance
As has been widely covered in the news, the former
chief executive of Tesco was awarded a £6.4 million
pay package in May, the biggest of any executive
at the chain in almost a decade.
Dave Lewis, who left the helm of the supermarket
in September, was set to receive a £2.4 million
cash bonus, a £2.4 million long-term share bonus,
and £1.6 million basic salary and benefits.
As the Guardian reported at the time, “his basic
salary alone is 355 times that of the lowest-paid
average employee”.
HOW WE’VE BEEN ENGAGING WITH TESCO
ON EXECUTIVE PAY
We have been questioning Tesco on remuneration
issues since 2015.
In 2018 we voted against its pay policy.
We had historically supported Tesco’s executives
being predominantly incentivised to increase total
shareholder returns, and approved its remuneration
package in 2017.
But in 2018 Tesco shifted its remuneration policy
to focus on earnings per share instead – something
that we felt was less aligned with the interests
of shareholders.
"Calls of caution were ignored,
and Dave Lewis’ long-term share
bonus last year was boosted
by £1.6 million on the basis
of Tesco’s share performance
compared with rivals’"
Sustainable Investment Report
20
Q4 2020Executive pay is influenced by Tesco’s share OUR ASK OF TESCO
performance relative to a custom list of rivals. Executive remuneration performance criteria are
In 2020, Tesco removed Ocado from that custom approved by shareholders at the company’s AGM,
list, with effect from May 2018. By doing so, so we consider any retrospective changes a red flag.
Tesco’s relative share performance notably
improved, leading to a handsome benefit for While we would agree that Ocado has shifted away
company executives. from being a retail-focused business, this technology
strategy was actually announced prior to 2017 when
HOW TESCO’S CHANGING BENCHMARK the peer group was set.
INFLATED PAY
Tesco admitted that removing Ocado affected "Ultimately, 67% of Tesco’s
awards granted, as the latter’s share price
appreciation meant Tesco would have
shareholders voted against
underperformed in benchmark comparators. the then CEO’s £6.4 million
The impact of this meant that Tesco’s total pay package, so it’s something
shareholder return moved from a 4.2% that we were not alone
underperformance to a 3.3% outperformance.
in condemning"
"The fact that Tesco had However, the vote to approve the remuneration report
outperformed the new was advisory rather than binding, meaning Dave Lewis
was still eligible for the boosted pay package.
benchmark meant that
We’re regularly engaging with hundreds of companies
the former CEO’s long-term on remuneration and, especially in light of Covid-19,
share bonus was £2.4 million about how they’re dealing with executive pay and
rather than £800,000" using their discretion.
In the case of Tesco particularly, we will keep engaging
The company explained that because Ocado with the business ahead of the 2021 annual general
was a technology provider rather than a company meeting. The alteration to its executive pay has not
in the food and retail index it should no longer gone unnoticed by commentators so we expect
be considered a direct competitor. pressure to build.
Sustainable Investment Report
21
Q4 2020AC T I V E O W N E R S H I P
Engagement in numbers
ENGAGEMENT BY TIER
Tier Scope Number of engagements
1 In-depth, Sustainable Investment team-led engagements 72
2 Analyst/fund manager-led engagement 121
3 Collaborative engagement and communicating expectations at scale 291
4 Influence through actively voting on all holdings and conducting company meetings 2778
5 Industry involvement and public policy influence Reported annually
Regional engagement (tiers 1 – 3)
41%
11%
20%
20%
4%
UK 41%
Asia Pacific 20%
Europe (ex-UK) 20%
North America 11%
4%
Latin America 4%
Middle East and Africa 4%
Source: Schroders as at 31 December 2020
Engagement type (tiers 1 – 3) Engagement by sector (tiers 1 – 3)
3% 2% 4% 2%
4% 1%
13%
4%
28%
4%
14% 9%
68%
10%
20%
14%
Email Group call Financials Energy
Collaborative Engagement Group meeting Materials Health Care
One to one call Industrials Utilities
Consumer Discretionary Real Estate
Information Technology Telecommunication Services
Consumer Staples
Source: Schroders as at 31 December 2020 Source: Schroders as at 31 December 2020
Sustainable Investment Report
22
Q4 2020AC T I V E O W N E R S H I P
Voting in numbers
We believe we have a responsibility to exercise our voting rights. This quarter we voted on 951 meetings and approximately
We therefore evaluate voting issues on our investments and vote 99.68% of all resolutions. We voted on 26 ESG-related
on them in line with our fiduciary responsibilities to clients. We shareholder resolutions, of which we voted with
vote on all resolutions unless we are restricted from doing so management on 20.
(e.g. as a result of share blocking).
The charts below provide a breakdown of our voting activity
from this quarter. Our UK voting decisions are all available on our
website at http://www.schroders.com/en/about-us/corporate-
responsibility/sustainability/influence/.
Company meetings voted
18%
10%
17%
46%
6%
Asia Pacific 46%
UK 18%
3%
Europe (ex-UK) 17%
North America 10%
Middle East and Africa 6%
Latin America 3%
Source: Schroders as at 31 December 2020
Direction of votes this quarter Reasons for votes against this quarter
1% 1%
6% 1%
13%
9%
11% 39%
86%
12%
21%
For Against Abstain Remuneration Reorganisation & Mergers
Director related Shareholder Proposals
Allocation of capital Anti-takeover
Routine Business Other
Source: Schroders as at 31 December 2020 Source: Schroders as at 31 December 2020
Sustainable Investment Report
23
Q4 2020AC T I V E O W N E R S H I P
Which companies STAKEHOLDER BREAKDOWN OF TIER 1–3 ENGAGEMENTS
we've engaged with 1% 1% Employees
Governance
3%
484 tier 1–3 engagements took place this quarter with the Environment
443 companies listed below. The table summarises whether 13%
Community
the broad range of topics discussed with each company fall Stakeholders Customers
under "environmental", "social" or "governance" issues. The chart 35%
discussed Regulators &
opposite illustrates the topics discussed this quarter categorised governments
Suppliers
by stakeholder.
23%
24%
Company E S G Company E S G
Consumer Discretionary PagSeguro ✔
4imprint Group ✔ Persimmon ✔
Adidas ✔ Pets at Home Group ✔
Amazon ✔ Prada ✔ ✔ ✔
Bellway ✔ Realestate.com ✔
Beyond Meat ✔ Redrow Group ✔
Bovis Homes ✔ RELX Group ✔
Bridgepoint Education ✔ Renault ✔
Burberry ✔ Restaurant Group ✔
Denso ✔ Schibsted ✔
Dunelm ✔ Sega Sammu ✔
EG Global Finance ✔ Taylor Wimpey ✔
Electrolux ✔ Tesla Motors ✔
Euromoney ✔ Trinity Mirror ✔
Fulham Shore ✔ Tui ✔
Future ✔ Volkswagen ✔
Games Workshop ✔ WH Smith ✔
Gentex Corporation ✔ Whitbread ✔
Grupo Televisa ✔ William Hill ✔
GVC Holdings ✔ WPP ✔ ✔
Howden Joinery ✔ Consumer Staples
Inchcape ✔ Carrefour ✔
Informa ✔ Casino, Guichard-Perrachon et Cie ✔ ✔
J D Wetherspoon ✔ Colruyt Group ✔
JD Sports Fashion ✔ Cranswick ✔
Marks and Spencer ✔ Danone ✔
Mitchells and Butlers ✔ Eastern Co ✔
Namco Bandai Holdings ✔ Greencore ✔
Ocado Group ✔ Greggs ✔
Paddy Power Betfair ✔ Hilton Food Group ✔
Source: Schroders, 31 December 2020.
The companies and sectors mentioned herein are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
Sustainable Investment Report
24
Q4 2020Company E S G Company E S G
Imperial Brands ✔ Bangkok Bank ✔
JSL ✔ ✔ ✔ Bank Mandiri ✔ ✔
Pz Cussons ✔ Bank of America ✔
Reckitt Benckiser ✔ Bank of China ✔
SSP Group ✔ Bank of Communications ✔
Tesco ✔ ✔ Bank of the Philippine Islands ✔
Energy Barclays ✔
Alfen Power ✔ BBGI ✔
BP ✔ Beazley ✔
China Shenhua Energy ✔ Brewin Dolphin ✔
CNOOC ✔ ✔ British Land ✔ ✔
Coal India ✔ Bromford Housing Association ✔
Energean ✔ Brooks Macdonald ✔
Gazprom ✔ Catalyst Housing ✔
ITM Power ✔ Cerved Information Solutions ✔
JinkoSolar Holding ✔ Cheung Kong Property ✔
Lukoil ✔ China Construction Bank ✔
Lundin Petroleum ✔ Citigroup ✔
Novatek ✔ Clarion Housing Group ✔ ✔
Petrobras ✔ Close Brothers ✔ ✔
Rosneft ✔ CLS Holdings ✔
Shaanxi Coal Industry ✔ Commerzbank ✔
Technip ✔ Credit Agricole ✔
Wintershall Dea ✔ ✔ Credit Suisse ✔ ✔ ✔
Wood Group ✔ DBS Bank ✔
Woodside Petroleum ✔ Derwent London ✔
Financials Deutsche Bank ✔
3i Group ✔ Direct Line Insurance ✔
ABN Amro ✔ Emirates ✔
Admiral Group ✔ Equity Lifestyle Properties ✔
AJ Bell ✔ Erste Bank ✔ ✔
Allied Irish Banks ✔ First Abu Dhabi Bank ✔
Amlin ✔ FirstRand Bank ✔
Arab National Bank ✔ Grainger ✔
Ashmore Group ✔ ✔ Great Portland Estates ✔
Assura ✔ Grupo Financiero Inbursa ✔
Aviva ✔ Haitong Securities ✔
Banco De Oro ✔ Hargreaves Lansdown ✔
Banco de Sabadell ✔ Heimstaden Bostad ✔
Banco Itau ✔ ✔ ✔ HSBC ✔
Banco Santander ✔ Huntington Bancshares ✔
Source: Schroders, 31 December 2020.
The companies and sectors mentioned herein are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
Sustainable Investment Report
25
Q4 2020Company E S G Company E S G
Industrial and Commercial Bank of ✔ Regions Financial ✔
China
Rexford Industrial Realty ✔
Industrivarden ✔
Royal Bank of Canada ✔
ING ✔
Safestore Holdings ✔
Integrafin ✔
Samba Financial Group ✔
Intesa Sanpaolo ✔
Sanctuary Capital ✔
Invitation Homes ✔
Sanne Group ✔
John Laing Environmental Assets ✔
Savills ✔
JP Morgan Chase ✔
Segro ✔
Jupiter Fund Management ✔
Shaftesbury ✔
Kasikornbank ✔
Shinhan Financial Group ✔
Kookmin Bank ✔
Shopping Centres Australasia ✔
Lancashire ✔
Siam Commercial Bank ✔
Land Securities ✔
South State ✔ ✔
Landmark Infrastructure Partners ✔
Sovereign Housing Capital ✔ ✔
Law Debenture ✔
St James's Place Capital ✔
Legal & General ✔
St Modwen Props ✔
Libra (Longhurst Group) Treasury ✔
Standard Bank Investment Corp ✔
Lloyds Banking Group ✔ (SBIC)
LSE ✔ Standard Life ✔
Man Group ✔ Sumitomo Mitsui Financial ✔
Mirvac Group ✔ Sun Communities ✔
Mitsubishi Estate ✔ Sun Hung Kai Properties ✔
Mitsubishi UFJ Financial Group ✔ TBC Bank ✔
Mitsui Fudosan ✔ Terreno Realty Corporation ✔
Mizuho Financial Group ✔ UBS ✔
National Bank of Kuwait ✔ Unicredit ✔
Nordea Bank ✔ Unite Group ✔
Notting Hill Housing Trust ✔ United Overseas Bank ✔
OneSavings Bank ✔ Vicinity Centres ✔
Optivo Finance ✔ ✔ Workspace Group ✔
OTP ✔ ✔ ✔ Health Care
Overseas Chinese Banking ✔ Alcon ✔ ✔ ✔
Corporation
AstraZeneca ✔
Paragon Group ✔
Biohaven Pharmaceutical ✔ ✔ ✔
Partners Group ✔
Cheplapharm Arzneimittel ✔
Phoenix Holdings ✔ Danaher ✔
Provident Financial ✔ ✔ DaVita Incorporated ✔
Qatar National Bank ✔ Dechra Pharma ✔
Raiffeisen Bank International ✔ ✔ Genus ✔
Rathbone Brothers ✔ Johnson & Johnson ✔
Source: Schroders, 31 December 2020.
The companies and sectors mentioned herein are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
Sustainable Investment Report
26
Q4 2020Company E S G Company E S G
Lepu Medical Technology Beijing ✔ Larsen & Toubro ✔
Lonza Group ✔ Localiza Rent A Car ✔
Puretech Health ✔ Meggitt ✔
Santen Pharmaceutical ✔ ✔ ✔ Michael Page ✔
Sonic Healthcare ✔ Mineral Resources ✔
Syncona ✔ National Express ✔
Thermo-Fisher ✔ Prosegur Cash ✔
TMO ✔ Qinetiq ✔ ✔
Udg Healthcare ✔ Rentokil Initial ✔
Industrials Rolls-Royce ✔
Acuity Brands ✔ Rotork ✔
Aggreko ✔
Royal Mail ✔
Andritz ✔
Schneider Electric ✔
Ashtead ✔
Serco Group ✔
Assa Abloy ✔
Shenzhen Inovance Technology ✔
Avon Rubber ✔
Skil Ports And Logistics ✔
B&M European Value Retail ✔
Smiths Group ✔
Babcock Intl Group ✔
Spirax-Sarco Engineering ✔
Balfour Beatty ✔ ✔
The Capita Group ✔
Bunzl ✔ ✔
TI Fluid Systems ✔
China International Marine ✔ Tomra Systems ✔
Containers
TPI Composites ✔
Clarkson ✔
Trainline ✔
DCC ✔
Travis Perkins ✔
De La Rue ✔
Dialight ✔ United Tractors ✔
Diploma ✔ Vesuvius ✔
Dormakaba Holding ✔ Weg ✔ ✔
EasyJet ✔ Weir Group ✔ ✔
Getlink ✔ Wizz Air ✔
Grafton ✔ Wolseley ✔
Hays ✔ Information Technology
Homeserve ✔ Activision Blizzard ✔
IMI ✔ Asustek Computer ✔
International Consolidated Airlines ✔ Auto Trader Group ✔
Intertek ✔ Avast ✔
IWG ✔ Aveva Group ✔
J Fisher & Sons ✔ Cap Gemini ✔
John Laing Group ✔ Capcom ✔
Keller Group ✔ CD Projekt ✔
Kingspan Group ✔ ✔ Check PT Software ✔
Source: Schroders, 31 December 2020.
The companies and sectors mentioned herein are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
Sustainable Investment Report
27
Q4 2020Company E S G Company E S G
Cisco Systems ✔ Anglo American Platinum ✔
Dena ✔ AngloGold Ashanti ✔
Electronic Arts ✔ Anhui Conch Cement ✔
FDM Group ✔ Antofagasta ✔
Genpact ✔ Arcelor Mittal ✔
Hewlett Packard ✔ Barrick Gold ✔
Hexagon ✔ BHP Billiton ✔
II-VI Incorporated ✔ Boliden ✔
Kainos ✔ Borregaard ✔ ✔
KLA Tencor ✔ Crest Nicholson ✔
Konami Holdings ✔ CRH ✔
Micro Focus ✔ Croda International ✔
Money Supermarket ✔ DS Smith ✔ ✔
NCC Group ✔ DSM ✔ ✔
Nexon ✔ Evraz ✔
Nintendo ✔ Ferrexpo ✔
Oracle ✔ First Quantum ✔
Oxford Instruments ✔ Fortescue Metals ✔ ✔
Playtech ✔ Freeport-McMoran ✔
Renishaw ✔ Glencore ✔
Seagate ✔ ✔ ✔ GMK Norilsk Nickel ✔ ✔
Sequoia ✔ Gold Fields ✔
Silverlake ✔ Grupo Mexico ✔
Solaredge Technologies ✔ Hexpol ✔
Spectris ✔ ✔ Hill & Smith ✔
Square Enix Holdings ✔ Hochschild Mining ✔
Take-Two Interactive Software ✔ Holmen ✔
Tencent ✔ ✔ Ibstock ✔
Ubisoft Entertain ✔ Iluka Resources ✔
Unisplendour ✔ Impala Platinum ✔
Venustech Group ✔ Incitec Pivot ✔
Yandex ✔ Independence ✔
Zhejiang Chint Electrics ✔ Industrias Penoles ✔
Zynga ✔ Jiangxi Copper ✔
Materials Jiangxi Ganfeng Lithium ✔
Acerinox ✔ Kardemir ✔
African Rainbow Minerals ✔ KGHM Polska Miedz ✔
Agnico Eagle Mines ✔ Kinross Gold ✔
Alcoa ✔ Korea Zinc ✔
Alrosa ✔ Kumba Iron Ore ✔ ✔
Anglo American ✔ Lafargeholcim ✔ ✔ ✔
Source: Schroders, 31 December 2020.
The companies and sectors mentioned herein are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
Sustainable Investment Report
28
Q4 2020You can also read
